1. PowerPoint Presentation by Charlie Cook The University of West Alabama © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

2. 4–2 1.Discuss managerial ethics, three areas of special ethical concern for managers, and how organizations manage ethical behavior. 2.Identify and summarize key emerging ethical issues in organizations today. 3.Discuss the concept of social responsibility, specify to whom or what an organization might be considered responsible, and describe four types of organizational approaches to social responsibility. 4.Explain the relationship between the government and organizations regarding social responsibility. 5.Describe some of the activities that organizations may engage in to manage social responsibility. Learning Objectives After studying this chapter, you should be able to:

3. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–3 Individual Ethics In Organizations EthicsEthics  An individual’s personal beliefs regarding what is right and wrong or good and bad. Ethical BehaviorEthical Behavior  “Eye of the beholder” or behavior that conforms to generally accepted social norms. Examples of Unethical BehaviorExamples of Unethical Behavior  “Borrowing” office supplies for personal use.  Surfing the Internet on company time.  Filing falsified or inflated business expense reports.

4. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–4 Determinants of Individual Ethics Family Peers Individual Experiences Values and Morals Individual Ethics An individual’s ethics are determined by a combination of factors.

5. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–5 4.1 Managerial Ethics Three basic areas of concern for managerial ethics are the relationships of the firm to the employee, the employee to the firm, and the firm to other economic agents.

6. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–6 Ethics in Organizations Organizational Values Individual Values Managerial Values

7. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–7 Ethics in Organizations (cont’d) Train Employees Written Code of Ethics Individual Issues: Behavior, Conscience, Privacy Top Management Involvement Managing Ethical Behavior

8. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–8 Applying Ethical Judgments Model for deciding whether or not a particular action or decision is ethicalModel for deciding whether or not a particular action or decision is ethical  Gather relevant factual information.  Determine the most appropriate moral values.  Make a judgment. Ethical Norms Affecting ActionsEthical Norms Affecting Actions  Utility  Rights  Justice  Caring

9. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–9 4.2 A Guide for Ethical Decision Making

10. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–10 Maintaining Organizational Justice Distributive justice Procedural justice Interpersonal justice Informational justice Forms of Organizational Justice

11. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–11 Emerging Ethical Issues in Organizations Ethical leadership Information technology Emerging Ethical Issues Corporate governance

12. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–12 Social Responsibility and Organizations Organizational StakeholdersOrganizational Stakeholders  People and organizations directly affected by the behaviors of an organization and that have a stake in its performance. Social ResponsibilitySocial Responsibility  The set of obligations an organization has to protect and enhance the societal context in which it functions. Areas of Social ResponsibilityAreas of Social Responsibility  Stakeholders  The natural environment  The general social welfare

13. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–13 4.3 Organizational Stakeholders

14. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–14 4.4 Arguments for and Against Social Responsibility

15. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–15 4.5 Approaches to Social Responsibility

16. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–16 Social Responsibility Approaches Obstructionist StanceObstructionist Stance  Do as little as possible. Defensive StanceDefensive Stance  Do only what is legally required and nothing more. Accommodative StanceAccommodative Stance  Meet legal and ethical obligations and go beyond that in selected cases. Proactive StanceProactive Stance  Organization views itself as a citizen and proactively seeks opportunities to contribute to society.

17. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–17 4.6 How Business and the Government Influence Each Other

18. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–18 Managing Social Responsibility Legal compliance Ethical compliance Philanthropic giving Formal Organizational Dimensions Organization leadership and culture Whistle Blowing Informal Organizational Dimensions

19. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–19 Managing Social Responsibility: Formal Organizational Dimensions Legal ComplianceLegal Compliance  Extent to which the organization conforms to local, state, federal, and international laws. Ethical ComplianceEthical Compliance  Extent to which members of the organization follow basic ethical/legal standards of behavior. Philanthropic GivingPhilanthropic Giving  Awarding of funds or gifts to charities and other social programs.

20. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–20 Managing Social Responsibility: Informal Organizational Dimensions Organization Leadership and CultureOrganization Leadership and Culture  Leadership practices and the culture of the organization can help define the social responsibility stance an organization and its members will adopt. Whistle BlowingWhistle Blowing  The organizational response to the disclosure by an employee of illegal or unethical conduct on the part of others within the organization is indicative of the organization’s stance on social responsibility.

21. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–21 Evaluating Social Responsibility Concept of Ethical ControlsConcept of Ethical Controls  Evaluating organizational responses to questionable legal or ethical conduct:  Initiate an immediate follow-up response to events?  Seek punishment for those involved?  Engage in delay or cover-up tactics?

22. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.4–22 Evaluating Social Responsibility (cont’d) Clearly define social goals Analyze resources applied Determine if goals are being met Corporate Social Audit Recommend changes for improvement